KYC process in Car insurance
As per the new mandate of the Insurance Regulatory & Development Authority of India or IRDAI, it is now mandatory to get the KYC process done in car insurance. It was implemented on January, 1st, 2023 to make the insurance process more convenient and less fraudulent. Read on to know all about the KYC process in car insurance.
About KYC in Car Insurance
KYC or Know Your Customers is a process wherein the insurance company verifies the authenticity of the customers. With KYC being mandatory in car insurance, IRDAI is hopeful that the same will bring positive changes. Thus, to take the process of KYC process further, all insurance companies are supposed to collect KYC-related documents such as aadhaar card, PAN card, and others at the time any customer is buying a car insurance policy.
Some of the key things to know about KYC in car insurance are as follows:
- For those who already have car insurance, the KYC process will be initiated from the insurance company’s end. As per IRDAI, all insurers are requested to complete the KYC process for existing customers within 1 year.
- For those who are planning to buy a car insurance policy for the first time are required to undergo the KYC process during the time of buying itself.
Documents Required for KYC Process in Car Insurance
Listed below are the documents required to complete the KYC process for car insurance:
Identification Proof:
In order to serve as the identification proof of the customers, the government has specified documents such as aadhaar card, voter ID, driving license, passport, PAN card, or ID proofs which are issued by government authorities, professional entities, or universities.
Address Proof:
To complete the KYC process in car insurance, customers also need to submit documents that will serve as address proof. The documents that serve as proof of address are rental agreements, voter ID, ration card, electricity bill, house maintenance bill, bank account statements, gas bills, and, phone bills.
What is the KYC Process for Car Insurance?
There are a few KYC processes in car insurance that are approved by the IRDAI such as the following:
- Aadhaar-based KYC which can be done both online and offline
- Paper-based KYC in which an individual needs to complete the KYC process in person. Hence, in the paper-based KYC process, individuals need to submit hard copies of KYC-related documents to the insurance company. It is more beneficial as in this process the policyholder is right there to submit the documents and thus this reduces the chances of error.
- Video-based KYC is another process that is approved by IRDAI. In video-based KYC, customers need not be physically present. Video verification is performed during which policyholders submit all the documents virtually. Compared to the offline process, the video-based KYC is faster and hassle-free.
Why is KYC Process in Car Insurance Important?
There are multiple benefits of the KYC process in car insurance such as the following:
- With the KYC process in car insurance, it will become easier for car insurance companies to keep a record of the policyholders in one place.
- KYC in car insurance will also remove the chances of fraud, wherein customers will be unable to have multiple car insurance policies at the same time.
- KYC in car insurance also ensures greater customer satisfaction and makes the car insurance claim process easier. This is because all the details of the policyholder will get stored during the KYC process, making it easier for claim settlement.
Why is KYC Process in Car Insurance Important?
There are multiple benefits of the KYC process in car insurance such as the following:
